I find the budget line ‘Auto Insurance’ is just that, all over the map – from $800 to $1600 a year for an individual, up to nearly $3000 a year for a couple. And, the low price isn’t always from the same company nor for the same driver profile – it’s random. Bottom-line, you have to shop!

A recent graduate of the 3rd Decade™ Program brought a BBC News article to my attention. Titled “Insurer ‘made money from my loyalty’”, it profiles a fellow who, after 20 years of loyalty to his insurance provider, realized he could buy a comparable homeowner’s policy for about $1600 less a year. A British government representative responded by saying “[consumers] shouldn’t have to be constantly on guard, spending hours searching for or negotiating a good deal, to avoid being trapped into bad value contracts or falling victim to stealth price rises.” But, alas, we do have to be on guard.

A search of consumers’ auto coverage conversations on Reddit provides examples:

  • [I] decided to see if we could save a little money if I switched to someone else. My new rates for the same coverage are $117.05 a month. I’m saving $168.03 A MONTH and all it cost me was a half hour online researching policies and a phone call to cancel my current one….we tend to get into the habit of just paying bills as they come in. Every 6 months or whenever your policy runs out do a quick check online to see if you can save some money by switching.
  • I shop around every 6 months. When I got my first car, the cheapest I could get was $155 for full coverage through xxxxxxxx,…6 months later, all other companies offered me full coverage with way better limits and deductibles for only ~$106. Moved over to xxxxxxxx since they were the cheapest and since [my then current provider] refused to “match” those prices. I saved a third of my bill by taking half an hour and requesting quotes from multiple places. 6 months after that, my bill is $95 through xxxxxx with even better limits/deductibles. I’ll be shopping around again in another few months.
  • I am an insurance attorney, these are my thoughts: Insurance is a highly regulated industry. Even a crappy company will give you decent insurance…When you pay more for insurance from a “better” company you’re not really getting better insurance, you’re getting a better claim handling experience. There will be less haggling over value and you’ll have an easier time speaking with an actual person who is knowledgeable about your claim…Don’t pick your coverage based on what you can afford, pick your coverage based on what you need and then pick the company that provides that coverage at a price you can afford.

Speaking of what you need, current Arizona law requires motorists carry “15/30/10” liability insurance: $15,000 to cover injuries to any one person in an accident, $30,000 for all injuries from the same mishap, and $10,000 for property/vehicle damage. But, keep in mind these limits were set in 1972 with the expectation that they would be raised as prices/costs increased – that hasn’t happened. It’s prudent to have higher minimums.

And, although the insurance attorney quoted above gives the impression that all insurance companies are created equal, a helpful tool to compare customer complaints can be found on the Arizona Department of Insurance website.

What can affect your rates you ask?

  • Age, gender, and marital status
  • Your credit score
  • Your driving record
  • Marital status
  • What car you drive, including its age
  • Whether you’re a newly licensed driver
  • If you have multiple vehicles on the same policy
  • The crime rate in the area where your car or truck will be parked
  • Whether you park your car in a gated community, a private driveway or on the public street

Unfortunately, shopping coverage is an annoying and time consuming task but it seems there are reputable quote comparison sites to make the job easier.

The task is likely worth the time it takes – go for it and let me know if and how much you save!